1. Field of the Invention
The present invention relates generally to data processing systems and more particularly to electronic commerce. Still more particularly, the present invention relates to an electronic auction method and system which generates off-increment bids using proxy bids.
2. Description of the Related Art
Prior to the advent of electronic auctioning over computer networks or electronic commerce, auctions were held in a group of gathered bidders with an auctioneer. An auction is conducted on behalf of a seller by an auctioneer. The auctioneer receives a list of items to be sold and possibly a minimum and/or reserve price for those items. During the auction, a plurality of bidders place bids under the guidance and control of the auctioneer. In some cases, multiple bidders may pool their bids, and the pooled bids are submitted as a single bid with a combined quantity to the auctioneer.
The auctioneer enforces the rules of the auction, such as minimum bid price and quantities, minimum bid incrementing from the previous bid for a new bid, and time limits for placing bids. Auction bidders are typically qualified as to their ability to complete the purchase should their bid be the winning bid prior to entering the auction room.
Many online auctioning systems such as “priceline.com” and “mercata.com” have become very popular for individuals and businesses to use to take advantage of auctions at which they cannot be physically present. Such e-commerce auctions or online auctions are usually conducted over a specified period of time of opening and closing for bids, and are typically conducted under one of several well-known sets of rules or models. These common models include “Dutch” auctions, progressive auctions, “Yankee” auctions, single-bid auction, sealed bid auctions, reserve auctions, and hybrids of these types of auctions. The “Dutch” and “Yankee” auctions permit bids on only a part of an offered lot.
However, most sales offering and bid systems conducted by manufacturers of goods or service providers are conducted under a different set of procedures and processes. In a typical trader and broker system for offering and accepting bids, a manufacturer or service provider will notify one or more traders of available products or services, quantities, and minimum acceptable bid values. The trader then provides offerings to one or more brokers, to which the brokers may respond with bids.
In typical auctions, a minimum bid is specified for an item. All entered bids must meet or exceed the minimum in order to be recorded in the auction. Often times, a minimum increment amount is also specified for bidding on the item, such that subsequent bids must exceed the current high bid for the item by the minimum increment amount.
In some known systems, off-increment bids are not permitted. An off-increment bid is a bid which increases the current high bid by an amount which is not an increment of the minimum increment amount. For example, if the current high bid for an item is $40.00 and the minimum increment is $5.00, a new bid of $47.00 would be an off-increment bid.
Some auctions permit proxy offers. A proxy offer allows a potential buyer to participate in the ongoing auction without having to constantly monitor the auction. A potential buyer may enter a proxy offer which is the maximum price this potential buyer is willing to pay for the item. The proxy offer will automatically enter the minimum increment price necessary to exceed the current bid up to the amount of the proxy offer without the buyer's involvement.
Systems which permit proxy bids and require minimum increments in the bidding often produce results which are either unexpected or to the disadvantage of the seller. For example, suppose bidder A has recorded a bid of $30.00 and holds a proxy bid for $45.00 for a particular item. For this item, the minimum increment is set at $5.00. If bidder B subsequently places a bid of $35.00, known systems will award the item to bidder A for $35.00 because bidder A was the first bidder to bid $35.00 via the proxy bid. This result is to the disadvantage of the seller because bidder A would have been willing to overbid bidder B to receive the item. The seller could have sold the item for more than $35.00.
In a second example, suppose bidder A has recorded a bid of $30.00 and holds a proxy bid for $40.00 for a particular item. For this item, the minimum increment is set at $5.00. If bidder B subsequently places a bid of $37.00, some known systems will award the item to bidder A for $30.00 because bidder B's bid is not permitted as an off-increment bid. In this case the seller is again disadvantaged because the item could have been sold for $37.00. Further, bidder A held a proxy bid for $40.00 and could have overbid bidder B's bid of $37.00 up to $40.00 if the minimum increment had permitted the bid.
Using this last example again, in other known systems, bidder B would be awarded the item for $37.00. Again, bidder A's proxy failed to overbid bidder B's bid of $37.00 because of the minimum increment.
Therefore, a need exists for a method and system in an electronic auction which generates off-increment proxy bids.